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The US Dollar vs. The Gold Standard

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#166    Br Cornelius

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Posted 12 October 2012 - 09:48 PM

View PostYamato, on 12 October 2012 - 09:19 PM, said:

I find it strange how nobody is insisting we chase after digital money created on a keyboard with our printing presses and engraving departments, how nobody is whining over how many new pieces of paper there are (aren't) in circulation accounting for all that phony wealth, but the moment you mention the gold standard everyone throws the entire financial system out the window for new rules that somehow only get applied to gold.   Paper gets worn out fast and the creation of new bills is more a process of replacing worn out pieces of paper (and maintaining an abundant supply of bills to meet expected market demand) than making the entire $50 trillion worth of credit out there paperized.  I could care less how much paper we have anymore vs. how much money it says we have in our electronic balances.  If reserves mattered they'd matter already; not just after some kind of metallic standard is reestablished for our currency.

"Let the people decide."  Hear hear!
Thats because you haven't been listening to what other people are actually saying to you.
We just don't accept that the Gold Standard is a solution to most of those issues.

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#167    Yamato

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Posted 13 October 2012 - 11:20 AM

View PostBr Cornelius, on 12 October 2012 - 09:48 PM, said:

Thats because you haven't been listening to what other people are actually saying to you.
We just don't accept that the Gold Standard is a solution to most of those issues.

Br Cornelius
It's a solution to stabilizing the real value of money.  

Congrats on all those gold investors you insist we keep enriching with the price action in this gold market.  The other people actually buying it are thanking you for your sacrifice while they bleed the Krugman fiat you're holding dry.

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#168    Karlis

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Posted 13 October 2012 - 02:18 PM

View PostYamato, on 13 October 2012 - 11:20 AM, said:

It's a solution to stabilizing the real value of money.  

~~~ ...
As I see it, that is a key point, which needs to be resolved: -- stabilizing the real value of money.

Has an irrefutable answer been suggested?


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Posted 13 October 2012 - 03:22 PM

View PostKarlis, on 13 October 2012 - 02:18 PM, said:

As I see it, that is a key point, which needs to be resolved: -- stabilizing the real value of money.

Has an irrefutable answer been suggested?

That is very simple: The standard should be based on the productions of the country emitting the currency, if a country produces 1 trillion in wares its currency should be  limited to 1 trillion. If they produce more they can have more, if they produce less the amount will be shrunk. Kills two problems at once: there is no more indiscriminate money printing and there is a strong incentive against "offshoring" jobs.

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#170    Yamato

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Posted 13 October 2012 - 10:46 PM

View Postquestionmark, on 13 October 2012 - 03:22 PM, said:

That is very simple: The standard should be based on the productions of the country emitting the currency, if a country produces 1 trillion in wares its currency should be  limited to 1 trillion. If they produce more they can have more, if they produce less the amount will be shrunk. Kills two problems at once: there is no more indiscriminate money printing and there is a strong incentive against "offshoring" jobs.
This is Keynes on steroids looking at where we are now and where we'd have to go to get there.  That equivalence relationship assumes a velocity of money of one, that is, money never changes over more than once, which is unrealistic because the same money is going to change hands multiple times, thus a much smaller amount of money will handle a much larger amount of production.   And how badly are these enormous oversupplies of unneeded money going to lag economic output?

If there were just more fallow money lying around that's from the government and here to help, maybe someone will lend it, right?   Wrong.  They can't even stop blowing up the money supply in the stagflation...errr recovery...they've got us in.   Economy growing?  We need more money!   Nobody lending?  Make more money!   It's gotten to the point that no matter what our economic situation is, inflating the money supply is the answer.   And best of luck unspilling all that liquid, especially in a down economy.   It's even been suggested by your fiat proponents already that contraction in the money supply leads to great depressions so it flies in the face of that theory while it inflates the money supply even more than the Keynesians have.

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#171    questionmark

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Posted 14 October 2012 - 08:45 AM

View PostYamato, on 13 October 2012 - 10:46 PM, said:

This is Keynes on steroids looking at where we are now and where we'd have to go to get there.  That equivalence relationship assumes a velocity of money of one, that is, money never changes over more than once, which is unrealistic because the same money is going to change hands multiple times, thus a much smaller amount of money will handle a much larger amount of production.   And how badly are these enormous oversupplies of unneeded money going to lag economic output?

If there were just more fallow money lying around that's from the government and here to help, maybe someone will lend it, right?   Wrong.  They can't even stop blowing up the money supply in the stagflation...errr recovery...they've got us in.   Economy growing?  We need more money!   Nobody lending?  Make more money!   It's gotten to the point that no matter what our economic situation is, inflating the money supply is the answer.   And best of luck unspilling all that liquid, especially in a down economy.   It's even been suggested by your fiat proponents already that contraction in the money supply leads to great depressions so it flies in the face of that theory while it inflates the money supply even more than the Keynesians have.

Now, why don't you put your evidence where your mouth is and show me which metal based (no matter if gold or silver) currency did not end in bust?

So, prescribing a medicine that we all know will end in failure, to the benefit of a very few gold hoarders, is about the most cynic thing I have heard in my life only befitting those who will walk over corpses to earn a few dollars.

That had to be said in this thread too.

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#172    Yamato

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Posted 15 October 2012 - 04:48 PM

View Postquestionmark, on 14 October 2012 - 08:45 AM, said:

Now, why don't you put your evidence where your mouth is and show me which metal based (no matter if gold or silver) currency did not end in bust?

So, prescribing a medicine that we all know will end in failure, to the benefit of a very few gold hoarders, is about the most cynic thing I have heard in my life only befitting those who will walk over corpses to earn a few dollars.

That had to be said in this thread too.
What on earth are you talking about sir?   I'm talking about basing our currency on gold, real money whose value hasn't gone anywhere near bust, ever.

The US dollar didn't bust.  It fluctuated less than one dollar per ounce of gold in 97 years.   Can you not understand or appreciate that?   Why?  What is your agenda to have this much acid to spill about a stable US dollar?   Do you have an inner hatred of the US?   I get the feeling there's subtle references to that sentiment here.

Listening to Milton Friedman, which was suggested by a fiat lover earlier, blaming gold for the great depression and not the Federal Reserve is the height of cluelessness.

"The power to declare war, including the power of judging the causes of war, is fully and exclusively vested in the Legislature.  The Executive has no right, in any case, to decide the question" ~ James Madison
"Peace cannot be achieved by force, only by understanding."  ~ Albert Einstein
"To deny people their human rights is to challenge their very humanity.   To impose on them a wretched life of hunger and deprivation is to dehumanize them." ~ Nelson Mandela
"I like your Christ, I do not like your Christians.  Your Christians are so unlike your Christ." ~ Mahatma Gandhi

#173    questionmark

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Posted 15 October 2012 - 04:50 PM

View PostYamato, on 15 October 2012 - 04:48 PM, said:

What on earth are you talking about sir?   I'm talking about basing our currency on gold, real money whose value hasn't gone anywhere near bust, ever.

The US dollar didn't bust.  It fluctuated less than one dollar per ounce of gold in 97 years.   Can you not understand or appreciate that?   Why?  What is your agenda to have this much acid to spill about a stable US dollar?   Do you have an inner hatred of the US?   I get the feeling there's subtle references to that sentiment here.

Listening to Milton Friedman, which was suggested by a fiat lover earlier, blaming gold for the great depression and not the Federal Reserve is the height of cluelessness.

Now wait, are you going to tell me, seriously that there was no 1819 grand depression and one following about every 8 years?

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#174    Yamato

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Posted 15 October 2012 - 09:47 PM

View Postquestionmark, on 15 October 2012 - 04:50 PM, said:

Now wait, are you going to tell me, seriously that there was no 1819 grand depression and one following about every 8 years?
Having hard money people could trust after the country was torn apart by war was important in our nation's recovery.   The effects of a hard standard vs. fiat are obvious in your own chart on Karlis's thread.    This fiat driven economy is going to hit the bricks some day.

"The power to declare war, including the power of judging the causes of war, is fully and exclusively vested in the Legislature.  The Executive has no right, in any case, to decide the question" ~ James Madison
"Peace cannot be achieved by force, only by understanding."  ~ Albert Einstein
"To deny people their human rights is to challenge their very humanity.   To impose on them a wretched life of hunger and deprivation is to dehumanize them." ~ Nelson Mandela
"I like your Christ, I do not like your Christians.  Your Christians are so unlike your Christ." ~ Mahatma Gandhi

#175    questionmark

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Posted 16 October 2012 - 08:27 AM

View PostYamato, on 15 October 2012 - 09:47 PM, said:

Having hard money people could trust after the country was torn apart by war was important in our nation's recovery.   The effects of a hard standard vs. fiat are obvious in your own chart on Karlis's thread. This fiat driven economy is going to hit the bricks some day.

And so has every gold/silver standard economy. So your point is?

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#176    Yamato

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Posted 16 October 2012 - 03:56 PM

View Postquestionmark, on 16 October 2012 - 08:27 AM, said:

And so has every gold/silver standard economy. So your point is?
A gold/silver standard economy?   I'm just talking about the US dollar.  

You can't see the instability on your own chart since the advent of the Federal Reserve system?   The value of our dollar should be reliable, predictable, consistent, medium/moderate, steady, and resistant to shocks.   Having sound money won't solve all economic problems.  It might prevent some of them.  But it will reduce the sting of all of them.    A gold standard won't solve every economic problem, and it certainly won't grow the economy faster than Bernanke's flood of Federal Reserve Notes next quarter.  But it will bring prices back to earth and give our dying middle class a fighting chance again.  

A gold standard currency will not fail because gold is money that doesn't fail.  Fiat always goes to zero eventually, and no empire is going to last 6,000 years.   We're losing ours already.

"The power to declare war, including the power of judging the causes of war, is fully and exclusively vested in the Legislature.  The Executive has no right, in any case, to decide the question" ~ James Madison
"Peace cannot be achieved by force, only by understanding."  ~ Albert Einstein
"To deny people their human rights is to challenge their very humanity.   To impose on them a wretched life of hunger and deprivation is to dehumanize them." ~ Nelson Mandela
"I like your Christ, I do not like your Christians.  Your Christians are so unlike your Christ." ~ Mahatma Gandhi

#177    questionmark

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Posted 16 October 2012 - 04:08 PM

View PostYamato, on 16 October 2012 - 03:56 PM, said:

A gold/silver standard economy?   I'm just talking about the US dollar.  

You can't see the instability on your own chart since the advent of the Federal Reserve system?   The value of our dollar should be reliable, predictable, consistent, medium/moderate, steady, and resistant to shocks.   Having sound money won't solve all economic problems.  It might prevent some of them.  But it will reduce the sting of all of them. A gold standard won't solve every economic problem, and it certainly won't grow the economy faster than Bernanke's flood of Federal Reserve Notes next quarter.  But it will bring prices back to earth and give our dying middle class a fighting chance again.  

A gold standard currency will not fail because gold is money that doesn't fail.  Fiat always goes to zero eventually, and no empire is going to last 6,000 years.   We're losing ours already.

The US dollar is no different than any other currency and if it did not hit the floor yet it is for two reasons: The introduction of the FED after the great depression and the abolishing of the gold standard by Nixon, those were the two most likely time that it could have flown out of the curve.

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#178    DieChecker

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Posted 16 October 2012 - 04:58 PM

If the US is moved to a Gold Standard, then won't we still be affected by the rest of the world still using a fiat system? Unless we plan to stop using the dollar as a world standard, and stop trading with other nations, then there is still going to be a lot of affect, such as inflation, from foreign currency. It is impossible in the current world of e-trading and global commerce to isolate the US dollar from the rest of the world.

I still think the benefits of initiating a gold standard is not worth the cost. It is like a homeowner investing in solar panels when they are broke. Sure, in 40 years those panels will pay for themselves, but at the moment, the stress of buying them would put that poor fellow into bankruptsy.

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Posted 16 October 2012 - 05:03 PM

View PostDieChecker, on 16 October 2012 - 04:58 PM, said:

If the US is moved to a Gold Standard, then won't we still be affected by the rest of the world still using a fiat system? Unless we plan to stop using the dollar as a world standard, and stop trading with other nations, then there is still going to be a lot of affect, such as inflation, from foreign currency. It is impossible in the current world of e-trading and global commerce to isolate the US dollar from the rest of the world.

I still think the benefits of initiating a gold standard is not worth the cost. It is like a homeowner investing in solar panels when they are broke. Sure, in 40 years those panels will pay for themselves, but at the moment, the stress of buying them would put that poor fellow into bankruptsy.

Quite so, because imagine that all pull a deGaulle and want their bills paid in gold instead of dollars.

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#180    Yamato

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Posted 17 October 2012 - 08:17 PM

View Postquestionmark, on 16 October 2012 - 04:08 PM, said:

The US dollar is no different than any other currency and if it did not hit the floor yet it is for two reasons: The introduction of the FED after the great depression and the abolishing of the gold standard by Nixon, those were the two most likely time that it could have flown out of the curve.
Gold doesn't vanish in value 95% in 95 years.   If that's not hitting the floor what is?   That's a predicable rockslide to zero.  The curve will flatten out now that we've come so far, especially in the new global marketplace, but when the US loses its preeminence in the world, having a sound currency is the best prescription for the health of the US economy.   The US dollar was solid as a rock under the gold standard but a Greek debt holder doesn't care about that, so long as the US dollars that will come flooding across your borders and buying out your troubled assets are still worth enough to save you from a rusting and desolate future.  

In the land of the blind, the one eyed man in king.  I recommend buying the US dollar right now on pure technicals for a short-term hold against other currencies, because while the US dollar is no safe haven, people still think it is and so long as that is true they will run to it when Europe falls overboard.  I want the kind of monetary policy where that can remain true for another 200 years.  You are suspiciously opposed to sound money for some reason, and for a Greek you should probably talk more about your own yard than come trapsing through mine.

"The power to declare war, including the power of judging the causes of war, is fully and exclusively vested in the Legislature.  The Executive has no right, in any case, to decide the question" ~ James Madison
"Peace cannot be achieved by force, only by understanding."  ~ Albert Einstein
"To deny people their human rights is to challenge their very humanity.   To impose on them a wretched life of hunger and deprivation is to dehumanize them." ~ Nelson Mandela
"I like your Christ, I do not like your Christians.  Your Christians are so unlike your Christ." ~ Mahatma Gandhi




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